When people talk about estate planning, there are a lot of documents that are often discussed. Estate planning can sound like an alphabet soup of documents. But which are essential, “must-haves” to have a solid estate plan? The Northfield estate planning attorneys at Orlowsky & Wilson can provide you with more information.
One Size Doesn’t Fit All
We should start out by saying that just because certain documents are essential, or “must-have,” doesn’t mean your particular estate plan needs all of them. Likewise, your estate plan may need more than the essentials. Estate planning is a very individual process, so this is not a checklist of what you need—it’s just a rundown of the essential documents that most estate plans will tend to have.
We often write about why a will isn’t enough, and about the shortcomings of having only a will in your estate plan. This is true—a will, by itself, is often insufficient. But that doesn’t take away from the fact that the last will is an essential part (and some would say the central focus) of an estate plan.
Your will can say who will get what property, what will happen to your property, including your real estate or your business, and who will inherit items of sentimental value. A will is what keeps your property from simply going to whoever is designated to take property by law—which may not be right for you.
There are a lot of different kinds of trusts, but trusts can have a number of benefits, not the least of which is avoiding the probate process. Additionally, a trust will allow you to dictate rules of inheritance.
For example, under your will, if you leave property to your son, it goes to your son when you pass, no matter what, with no restrictions or guidance. But with a trust, you could designate how the money will be used (“to be used for college”) or when (“to be distributed when you turn 21”).
Health Care Directives
These are documents that say what will happen if you become incapacitated. They can include instructions on your end-of-life care, and who will make medical decisions for you.
Your directive may also include a power of attorney, which gives others power to run your affairs for you when you are incapacitated. The designee can do things like make your payments, manage your bank account, or do anything that you could do on your own.
Letter of Instructions (or Intent)
This is not a legal document, and won’t override what is in a will or a trust—but it can “fill in the blanks” of your will or trust, and give some guidance to what you want to happen with your estate, or what your intentions are in planning your estate.
You can leave instructions as to where to find assets, and where to find important documents like birth certificates or insurance information.
Letter of instruction also can include information on your digital assets, like passwords, cryptocurrency, or how to access social media accounts.
Does estate planning seem complex? We can help simplify it for you. Your Northfield estate planning lawyers at Orlowsky & Wilson, Ltd at (847) 325-5559 can help you create an estate plan that is right for you.